China's xFusion Clears Review for $1.2 Billion Shenzhen IPO After Huawei Spin-off

Chinese AI server maker xFusion Digital Technologies has cleared a key review by the Shenzhen Stock Exchange for its planned $1.2 billion listing, moving the former Huawei server unit a step closer to the public markets as demand for computing infrastructure keeps climbing.

The exchange's listing committee said in a filing dated November 12 that xFusion had met the requirements on share issuance, listing and information disclosure for a listing on ChiNext, the Shenzhen exchange's growth board, Reuters reported on November 13. The company plans to raise 8 billion yuan, about $1.2 billion, through the offering, according to its May prospectus.

It is the largest planned fundraising among companies to go before the ChiNext listing committee this year, according to Chinese financial press. The listing would also cap a fast journey for a company that began life as part of Huawei: the Chinese telecom giant spun off its x86 server business in 2021, and state capital from Henan province took control of the new company.

What the exchange decided

The review is a significant procedural milestone, but it does not mean the shares are already approved for trading. xFusion still needs to complete registration with the China Securities Regulatory Commission before the shares can be priced and listed.

The committee's approval came 174 days after the exchange accepted xFusion's application on May 22. The company plans to sell between 97.8 million and 220 million new shares, with CITIC Securities acting as sponsor for the proposed offering.

The questions regulators still want answered

Clearing the review did not come without scrutiny. According to the filing, the committee asked xFusion to explain the trend in its gross margin and whether the growth in its operating performance could be sustained.

Regulators also raised questions about changes in demand for computing capacity, capital expenditure by downstream customers, and the company's technological capabilities, and asked whether xFusion had adequately disclosed the risks associated with these factors. The filing stated there were no further matters for the company to address following the review.

The margin question matters because xFusion's business has grown fast on thin returns. Chinese press reports put its AI server gross margin at just 6.55 percent in 2025, with the overall margin on a declining trend even as revenue surged.

From Huawei spin-off to IPO candidate

xFusion makes computing infrastructure, including AI servers, according to its prospectus. Its revenue grew from 25.09 billion yuan in 2023 to 58.25 billion yuan in 2025, and in the first half of 2026 it posted revenue of 37.29 billion yuan with net profit of 2.11 billion yuan, according to figures reported by Chinese financial press.

Before the review, Chinese press reported the offering could value the company at up to 80 billion yuan, about $12 billion. If the deal completes at that scale, it would become the largest ChiNext listing accepted since China tightened IPO approvals, and a record for the capital markets of Henan province, where the company is based in Zhengzhou.

Where the money would go

According to the prospectus, xFusion plans to put 4.08 billion yuan of the proceeds into next-generation computing infrastructure, 2.03 billion yuan into a manufacturing park and research and development centre, and 890 million yuan into research on AI, computing and power architecture, with 1 billion yuan set aside for working capital.

The spending plan underlines where the company sees its future: building the hardware that powers artificial intelligence workloads, at a time when Chinese technology firms are racing to expand computing capacity. The broader AI server boom in the region has already drawn intense attention from investors and regulators alike, as the fallout from the Nvidia scandal has thrown a spotlight on Southeast Asia's AI infrastructure build-out.

What happens next

With the exchange review behind it, xFusion now moves to the registration stage with China's securities regulator. No pricing date or trading debut has been announced, and the final size and timing of the offering will depend on that process and on market conditions.

Investors will be watching two things: whether the regulator signs off without further conditions, and whether xFusion can convince the market that its rapid revenue growth can be sustained at margins regulators have already questioned.

Sources

• Reuters, "Chinese AI server maker xFusion clears review for $1.2 billion Shenzhen IPO", November 13, 2026 (via Economic Times and SRN News syndication)
• MLQ.ai, "Former Huawei server unit xFusion clears Shenzhen review for an 8 billion-yuan IPO, ChiNext's largest this year", November 13, 2026, citing the 21st Century Business Herald and 10jqka
• Finance Biggo, "China's Henan state capital bets five years on XFusion: CNY 80 billion valuation, CNY 8 billion IPO on the line this week", November 10, 2026